On December 20th, 2018 the summit of the Mediterranean countries of Israel, Greece and Cyprus was held in Beersheba (Israel). The main theme of the deliberations among the heads of the three states was the development of energy cooperation between the countries and the demonstration of support to Cyprus in its right to develop hydrocarbon production in its Exclusive Economic Zone.
The parties discussed the prospects of the “EastMed” gas pipeline project, which aims to provide natural gas transportation from the Mediterranean region to Greece and EU countries. According to the results of the meeting, an intergovernmental agreement on the construction of the gas pipeline can be signed in early 2019.
Yuval Steinitz, Israel’s Minister of National Energy and Water Resources said that “Noble Energy” and “Delek Group” have already expressed their willingness and interest in developing pipeline gas exports from Israel to the EU. Nowadays a decision on the creation of future consortium for the “EastMed” gas pipeline construction is awaited from an Italian energy company, Eni S.p.A.
Commenting on the meeting in Beersheba, Nicos Anastasiades, the President of Cyprus, noted that Greece and Cyprus have agreed on allocation of 7 billion USD on behalf of Israel for construction of the “EastMed” gas pipeline. He specified that the EU, in turn, will allocate 100 million EUR for the preparation of a feasibility study for the construction of a future underwater gas pipeline. At the same time, Israel will receive significant preferences from gas transportation through the gas pipeline to the EU.
Construction of a gas pipeline with the capacity of 20 billion cubic meters of gas per year will begin at a distance of 150 km from the southern coast of Cyprus, and the length of the maritime and continental part of the gas pipeline through the territory of Cyprus, Greece and Italy will amount to 2200 km. The commissioning of the first branch of the gas pipeline is scheduled for 2025 and the second – for 2030.
Shortly before the summit, on December 11th, 2018, Frank Fannon, Assistant Secretary for the Bureau of Energy Resources at the U.S Department of State, noted that proven reserves of hydrocarbon in the Mediterranean region have the potential to strengthen EU energy security by diversifying sources of gas. Consequently, the United States supports the decisions of the heads of Israel, Greece and Cyprus to accelerate the implementation of the “EastMed” gas pipeline project. In addition, F. Fannon noted that on December 29th, the first US LNG tanker with a volume of 150 thousand cubic meters of gas will arrive to the Greek LNG terminal “Revithoussa”. On December 13th, 2018, in Washington, Mike Pompeo, US Secretary of State, met with Georgios Katrougalos, the Alternate Minister of Foreign Affairs, where the parties discussed means of strengthening the strategic energy dialogue between the US and Greece and the prospects for long-term supply of American liquefied gas to Greece.
During the meeting in Beersheba, Charles Ellinas, the executive director of the Cyprus Natural Hydrocarbons Company Ltd, said that, despite the objections and arguments of Turkey, the American company ExxonMobil has already started drilling operations for geological exploration of “Block 10” of the Delphine marine deposit in the Cyprus’ Exclusive Economic Zone. In the case of a successful completion of searches in the area, the research drillship “Stena Icemax” owned by ExxonMobil will move to the area of the Cyprus gas fields “Glafkos” and “Anthea”.
As to the prospects of the successful implementation of the “EastMed” gas pipeline project, Charles Ellinas noted that the gas pipeline is now more political than a commercial project, because its technical implementation is complicated, the price of the future gas pipeline is rather high, and disputes with Ankara are still not resolved. However, the expert recalled the history of the “Baku-Tbilisi-Ceyhan” oil pipeline, which at first was a political project by the United States and Turkey as well, and nevertheless, was successfully implemented.
Photo from: ihsmarkit.com.
